Terri Ludwig, Social Entrepreneur: Generosity is Contagious

The NextWomen Social Entrepreneurship Theme

Recently
named to the Forbes
Impact 30 as
one of the 30 leading social entrepreneurs worldwide, Terri Ludwig is President and Chief Executive Officer of Enterprise
Community Partners, Inc., a national nonprofit provider of development
capital and expertise to create affordable homes and rebuild
communities.

Enterprise has pioneered neighborhood solutions through
public-private partnerships and invested more than $11 billion to create
nearly 300,000 affordable homes.

With 23 years of experience in investment banking and nonprofit
leadership, Terri joined Enterprise in 2009 as Executive Vice President
and Chief Operating Officer. She joined the company as President and CEO
in January 2011.

From 2002 to 2009, Terri served as President of the Merrill Lynch Community Development Company, where she led community development, committed more than $2 billion in loans and investments, launched a successful social investment platform for Merrill Lynch’s private clients and served as a senior advisor on diversity issues.

Before joining Merrill Lynch, Terri was the president and CEO of ACCION New York, the largest nonprofit micro-lender in the United States, whose mission is to lend small business owners the capital and support they need to achieve success.

Prior to her work at ACCION, Terri launched a highly successful
international sales effort for Global Foreign Exchange at Credit Suisse
First Boston. In
addition, Terri spent eight years with Merrill Lynch in the Structured
Investment and Global Foreign Exchange groups.

Terri was a Presidential appointee to the U.S. Department of the
Treasury Advisory Board for Community Development and Financial
Institutions and currently serves on the New York City Energy Efficiency
Corporation Board of Directors. She serves on numerous executive and
advisory boards and was selected for the Social Innovation Fellowship
for Nonprofit Leaders at the Stanford Graduate School of Business and
the David Rockefeller Fellows Program.

We
spoke to Terri about her hopes and aspirations for Enterprise Community Partners; her concerns about the rise of social enterprise; and and how the next generation of women leaders can get the best out of their employees.

TNW: What
are your hopes and aspirations for Enterprise Community Partners in 2013?

TL: We’re at a turning point as a country. We face tremendous economic
and political uncertainty at a time of increasingly desperate circumstances, especially
for the most vulnerable people among us. Unbearable housing burdens. Stubbornly
high unemployment. Failing schools. Inadequate and unaffordable healthcare. We
know that government alone can’t solve these problems, nor can private
business, nor can charity. These challenges require partnership and
collaboration.

I see Enterprise as an integral part of that effort in 2013. As a social
venture company, we’re in a unique position to link policymakers, community
groups, private investors and philanthropists that share a common purpose,
whether they’re motivated by profit, social impact or both.

My hope is for
Enterprise to help develop and implement bold new ideas for solving these problems,
grounded in a spirit of entrepreneurship.

Our primary work is to ensure people have a safe and affordable
place to call home. But today’s problems call for us to think beyond homes to
the broader community. Our goal is to connect the housing industry with educators,
transit planners, healthcare providers, economic developers, private-sector and
philanthropic investors, environmentalists, organizers and others with a stake
in thriving people and communities. Last year we released a working paper, Community Development 2020, that
sets forth an agenda for more collaborative action. It’s the beginning of a conversation
about how we can address old, stubborn problems in new ways.

TNW: Can
you give us a typical example of someone who your organisation has assisted?
How has the work of Enterprise Community Partners affected that person’s life,
in the short- and long-term?

TL: One example, and there are hundreds of thousands, is Heather Smith
and her young daughters, Chase and Genesis, who recently moved into a new home
in New York City. Heather was a signed recording artist in 2006 when she got
seriously ill and had to be hospitalized. She is a survivor of domestic
violence—Heather and her daughters practically lived at Barnes & Noble to
avoid going home.

Heather put in an application for an Enterprise-supported
development and was approved within a month. Heather describes her story as a
“miracle.”

Her new home was a fresh start. Now she’s emotionally healthier. She’s
working again. Her kids are healthier. Getting Chase and Genesis to school on
time is now a routine instead of a struggle.

Today Heather is volunteering in her community. She talks about
the importance of things others might take for granted, like having a place to
sit with her kids to share a meal. It’s a story like Heather’s that really
demonstrates the transformative power of a fit, stable and affordable place to
call home.

TNW: How
does the role of CEO in a large non-profit differ from that of a CEO of a large
corporate company?

TL: In a lot of ways. For one, CEOs of public companies are typically obligated
to maximize profits, regardless of the social impact of their work. Leaders of
nonprofits have more leeway to balance bottom-line finances with the good they
do in the world. It often has to do with the short-term pressures in today’s
capital markets, which often restrict a business’ ability to do what it does
best—create quality goods and services, invest in innovation and develop human
capital. Focusing more on long-term returns could bring a wider view to the
role of business, one that encompasses both financial and social goals.

As head of a nonprofit, the approach to staffing and retaining top
talent is different. Every job seeker wants some combination of money and
impact.

Many nonprofits can’t compete on the money side of that equation, so part of my job is to make sure that every Enterprise employee sees the ways in
which their work is contributing to the greater good.

I want them to know that
they’re making a real difference, and I see that as our competitive edge. As we look at the next generation of employees, I think impact will
weigh more and more heavily into career decisions, which makes organizations like
Enterprise much more attractive places from which to build a career.

TNW: What
kinds of programmes did you invest in during your time as President of the
Merrill Lynch Community Development Company? What did you look for when
deciding which projects to invest in?

TL: When I was with Merrill Lynch we were among the first investors in
the Enterprise Green Communities initiative in 2004. It helped me appreciate
the intersection of housing affordability and long-term environmental
sustainability—and how basic energy conservation measures can have a profound effect
on low-income families’ finances and general health.

That was my basic mandate at Merrill Lynch: to develop an
investing platform that could point to real improvements in low-income
communities—more jobs, new facilities, better and more affordable housing—while
ensuring a reasonable return. Through partnerships with Enterprise and other
organizations, we helped finance single-family and multifamily homes, charter
school facilities, small businesses, health care centers and other investments
in struggling communities.

TNW: Earlier
in your career, you served as President and CEO of ACCION New York, the largest
non-profit micro-lender in the United States. We have published several
interviews in which people have stated that enabling small scale entrepreneurs,
especially women in developing countries, is the key to turning around the
current economic decline. What are your thoughts on this?

TL: It certainly can be part of the solution. Microfinance can be both
a profitable business opportunity and a driver of social change, yielding both financial
and social returns. That’s particularly true for lending intended to help female
entrepreneurs—research shows that women invest back into their communities and
families at higher rates than men do. So the loans not only alleviate poverty
for the borrower, but they develop women as leaders and change agents that help
the broader community flourish.

But microfinance alone will not solve the world’s problems. We
must focus on partnerships among financial institutions, nonprofit groups and
government entities to maximize the financial and social returns on every
available dollar.

Social change often starts with capital, but you also need
innovative leaders to get an idea moving, then smart policies to bring it to scale and sustain it.

TNW: In
2011 you were named in the Forbes Impact 30, a list of the world’s top social
entrepreneurs. Which other social entrepreneurs/non-profit leaders do you
admire and why?

TL: I recently had the pleasure of getting to know Lance Fors, the
president of Social Venture Partners International in Silicon Valley. Lance is
a highly successful entrepreneur who is using his skills to push next-generation
thinking in the social sector. His group helps community-minded nonprofits
build long-term capacity by connecting them with informed and inspired
philanthropists. Their investments cover a range of social issues—education,
environmental protection, youth development—but are all deeply rooted in a
spirit of enterprise and entrepreneurship.

Lance has developed a model in which each stakeholder—investors,
investees, professional consultants, the surrounding community—is accountable
to each other and everyone mutually benefits from the investment’s success.

I’m always looking for new social entrepreneurs to join our team. Lance
recently joined Enterprise’s Board of Trustees, so we benefit from his
knowledge and experience first hand.

TNW: 'Social
Enterprise’ is such a buzzword at the moment. Is there anything about the huge
rise in, and trendiness of, social enterprises which concerns you?

TL: It’s a question we think about often.
Enterprise was created three decades ago as one of the original “social
enterprises” before that term even existed—a socially-driven self-sustaining
business that invests all profits back into the organization. Our vision then was the same as it is now: that
one day every person will have an affordable home in a vibrant community,
filled with promise and the opportunity for a good life.

We’re thrilled to see the social enterprise sector
growing, but as it does we need to avoid stamping everything with that label
just because it’s trendy. Impact must be key.

The concept of impact investing
has been evolving for decades, but in recent years it has emerged as a new
asset class. We helped by pioneering the Enterprise
Community Impact Note, which promises a healthy financial
return while investing in affordable housing developments, community health
centers, schools and other facilities.

Those of us in the social enterprise industry need to focus less
on mission statements and more on tangible, measurable strides toward achieving
those missions.

Big, bold goals are important, but we need to make sure that
all social enterprises are living up to their goals.

TNW: Do
you believe that there are government activities which would be better carried
out by non-profits or social enterprises? If so, which activities and why?

TL: I don’t necessarily think it’s a question of who does certain
activities better or worse, but rather how governments, nonprofits and social
enterprises can better work together to fulfill common goals. Whether it’s
responding to a natural disaster or minimizing the impact of a prolonged
housing crisis, both governments and communities play crucial roles.

No single
sector has a monopoly on great ideas, or on-the-ground know-how, or finding the most efficient way to use available resources.

One thing we take pride in at Enterprise—and I think history
supports our view—is our ability to foster public-private partnerships, to
break down silos and bring new thinking to old problems. And I think those
partnerships are increasingly important in an era of shrinking public resources
and growing social problems.

TNW: Do
you have an overriding motto or philosophy for life?

TL:

I’ve always believed in “paying it forward.” Generosity is
contagious —the more you put others before yourself, the more others do the same.

I want to start that kind of contagion, to create a system in which
someone gets a helping hand then turns around and offers their hand to someone
else.

That might sound pretty rosy, but this sort of mutual support is
at the core of a thriving community. I think it’s a powerful and worthwhile
goal.

TNW: Is there anything we haven’t asked you but you would like to share with our
community?

TL: A few thoughts for the next generation of women leaders from my
experiences so far:

Talent
building is everything. Every communication with your staff
is an opportunity to develop people, skills and relationships. Emotional
connection is what drives people—find a way to tap into that.

Owners
not subordinates. Hire talented people, give them
authority to make decisions in their divisions and include them in making the
big decisions that affect the overall organization, so that they feel
responsible for shaping the future of it.

Action
is required. Avoid “analysis paralysis.” Don't allow
people to procrastinate to avoid the hard decisions, give them clear
deliverables and deadlines—sooner rather than later.

Quirky
is good. Focus on finding ways to use employees’
strengths to benefit the organization. Individuals are not going to change who
they are and often what sets them apart. Their quirks and different ways of
thinking are what make them valuable assets to the organization.

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About TNW

The NextWomen is a community of Investors, Entrepreneurs & Advisers. We build formats to support the growth of female entrepreneurs -from
startups to companies making millions. We provide access to capital, resources and networks,
offering our community a support infrastructure critical for success. Join the community too! - See more at: http://www.thenextwomen.com/about-us/contributors#sthash.9GODHllB.dpuf

The NextWomen is a community of Investors, Entrepreneurs & Advisers. We build formats to support the growth of female entrepreneurs -from
startups to companies making millions. We provide access to capital, resources and networks,
offering our community a support infrastructure critical for success. Join the community too! - See more at: http://www.thenextwomen.com/membership/sign-up#sthash.0ApND3BW.dpuf

The NextWomen is
a community of Investors, Entrepreneurs & Advisers. We
build formats to support the growth of female entrepreneurs -from startups to
companies making millions. We provide access to capital, resources and
networks, offering our community a support infrastructure critical for success.